CD & CD Ladder Calculator

• Splits your money across 3, 4 or 5 CDs of staggered length so one comes due every year, and shows each rung's maturity value.
• Reports the blended APY today, the APY once the ladder is fully rolled, interest earned and interest after tax.
• Compares the ladder with one long CD and with a high-yield savings account over 5 to 20 years.
• Prices a single CD at maturity and if you break it early, using a penalty stated in months of interest.

How to use this calculator

Enter the total you want to invest, how many rungs you want, and the APY on a 1-year and a 5-year CD. The calculator fills in the terms between them on a straight line; open Advanced to type each term's rate yourself. Add the APY of a high-yield savings account to compare, and pick a single CD term to price on its own.

Advanced also sets the comparison horizon, your tax rate on interest (use 0 for a CD inside an IRA), the early-withdrawal penalty in months of interest and an optional month at which you would leave the single CD early.

What a CD ladder is

A CD ladder divides your money into equal parts and buys CDs of different lengths: for example 1, 2, 3, 4 and 5 years. When the 1-year CD matures, you reinvest it in a new 5-year CD, which usually pays more than a 1-year. A year later the 2-year matures and does the same. After the first cycle every CD you hold is a 5-year CD, one matures every year, and the whole ladder earns close to the 5-year rate.

The point is a middle path. One long CD usually pays the best rate but locks all of the money up. Savings give you full access at a rate that can change at any time. A ladder gives you a chunk of cash each year, at a rate that rises toward the long-term rate.

How the numbers are worked out

An APY already includes compounding, so a CD grows by its APY every year the interest stays in it:

Value at maturity = amount x (1 + APY)^(years)
Blended APY       = average of the rungs' APYs (equal amounts)
Early penalty     = principal x rate x (penalty months / 12)

Each rung is held to maturity and then rolled into a new CD of the ladder's longest length at the longest term's APY. The savings account compounds at its APY. After-tax interest subtracts your tax rate from the total interest.

A worked example

Put $50,000 into a 5-rung ladder, $10,000 on each rung. Take a 1-year APY of 4.25% rising in a straight line to 4.50% at 5 years. Today's blended APY is 4.375%, and once the ladder has rolled over, every rung earns 4.50%. The first rung matures after one year at $10,425.

After 10 years the ladder is worth about $77,463, which is $27,463 of interest, or $21,421 after a 22% tax. One 5-year CD rolled over at 4.50% ends at $77,648, so the ladder gives up $186 for annual access to cash. A savings account at 3.75% ends at $72,252, $5,211 less than the ladder. The savings rate that would tie the ladder is 4.47% over the decade.

With a flat curve at 4.50% the ladder costs nothing against one long CD, because every rung earns the same rate. With 4 rungs the 10-year value is $77,070. If savings paid 4.50%, it would be worth $77,648, ahead of the ladder, which is why the savings comparison is worth running with a rate you can actually get.

Early-withdrawal penalties

Banks charge a penalty to take money out of a CD before maturity, usually stated as a number of days or months of interest. Examples published by banks in 2026 include 90 days of interest on a 2-year CD and 270 days on a 3-year CD, and longer terms usually carry larger penalties. Terms differ by bank, so read the account agreement.

For the default 2-year CD at 4.312% APY, a 6-month penalty is $1,057 on $50,000. If you left at month 6, you would have earned about $1,067 of interest, so the penalty would take nearly all of it and you would get back about $50,009. When the penalty is larger than the interest earned, you lose principal. A ladder cuts the odds of this by putting a CD in reach every year.

Taxes and insurance

CD interest is ordinary income. It is taxable in the year it is credited or made available to you, even if it stays in the CD until maturity, and your bank reports it on Form 1099-INT or 1099-OID. A CD inside a traditional IRA grows tax-deferred, and inside a Roth IRA it can grow tax-free if the rules are met, so the tax-rate field can be set to 0 for those cases. This calculator subtracts tax from the total interest at one rate.

With no tax, the default ladder keeps all $27,463 of its interest. Bank CDs are insured by the FDIC and credit union CDs by the NCUA, up to $250,000 per depositor, per institution, per ownership category.

Assumptions and limitations

• Rates stay put. Each maturing rung is rolled at the longest term's APY you entered. Real renewals happen at whatever the bank offers that day, which may be lower.
• Equal rungs. The money is split evenly. You can unbalance a ladder by hand if you need more cash sooner.
• Interest stays in the CD. Some CDs pay interest out monthly, which lowers compounding.
• Simple penalty. The penalty is months of simple interest on the principal, which is the common stated form but not universal.
• Unmatured CDs at the horizon. They are valued at accrued interest before any penalty.
• One tax rate. Annual taxation is approximated by taking the tax out of the total interest.
• Not offers. The default rates are examples. Check the current APY, call features and the penalty before opening any CD.

Common mistakes

Ignoring what happens at maturity. Many CDs renew automatically for the same term. Note the grace period, usually a week or two, and act before it ends.

Comparing a CD with savings by rate alone. A savings account can be withdrawn at any time. The CD must beat savings by enough to justify the lock-up.

Laddering when rates are flat. If the 5-year rate is no higher than the 1-year, you lose little by staying short and keeping the cash available.

Putting more than the insured limit in one place. Large ladders can be spread across banks and ownership categories to stay inside the insurance limit.

Frequently asked questions